Video: Obama talks economy on ‘Tonight’

LOS ANGELES — President Barack Obama said Thursday evening that he was “stunned” to hear about the $165 million in bonuses that were paid to employees of troubled insurer AIG over the weekend, promising to do everything he could to “get these bonuses back.”

“These financial industries are holding us hostage,” Obama said in an interview on NBC’s “Tonight Show With Jay Leno.” It was the first time a sitting president has been a guest on a late-night talk show.

Obama said the AIG payments raised moral and ethical problems, but he stressed that the bigger problem was the culture that allowed traders to claim them.

“We need to get back to a place where people know enough is enough,” he said. “If we can get back to those values that built America, then we’ll be OK.”

Obama used the visit as an opportunity to defend Treasury Secretary Timothy Geithner, who has been sharply criticized for his handling of the AIG controversy. Sen. Johnny Isakson, R-Ga., called for Geithner to resign Thursday afternoon.

But Obama said Geithner was doing an “outstanding job,” handling a full plate with grace and good humor.

"He is a smart guy. He is a calm and steady guy," Obama said. "I don't think people fully appreciate the plate that was handed him."

Listing the recession, the banking crisis and the need to coordinate with other countries, Obama acknowledged that Geithner was “on the hot seat.” But he said too many in Washington were trying to figure out whom to blame when they should be focused on fixing the problems.

Comedian turns serious interviewer
The interview with Leno was the final stop of the president’s two-day visit to Southern California, where he undertook a whirlwind tour of appearances to rally support for his efforts to revive the recession-riven economy.

While Obama appeared on “The Tonight Show” as a candidate, none of his predecessors had ever appeared on the show — or any other late-night talk show — while in office.

“In a way, going on ‘The Tonight Show’ is Barack Obama’s version of the fireside chat,” said Michael Beschloss, a noted presidential historian.

Obama was seeking to “get his serious points across,” Beschloss said, but “in a way that, presumably, Americans are going to like.”

The appearance was billed as a chance for the president to reach ordinary Americans to talk about the economy, and Leno mainly played the role of serious interviewer, questioning Obama about the AIG controversy and the economy.

Obama complained that “most of the stuff that got us into trouble is perfectly legal,” adding, “That’s a sign that we need to change our laws.

“It’s legal to charge 30 percent on our credit cards,” he said. “When you buy a toaster, there’s a law that says your toaster needs to be safe, but no law that says if your credit card explodes, you’re safe.”

Presidential gaffe?
But it wasn’t all serious news of the day, and in attempting to make a joke about the White House bowling alley, the president may have made a serious misstep.

Video: Uncomfortable joke
Telling Leno that he had not removed the alley, Obama said he had recently recorded a 129 game, significantly better than he had in a widely mocked campaign appearance, when he rolled a gutter ball on camera.

Then he added: “It was like Special Olympics or something,” a reference to the athletic festival held every two years for people with mental disabilities.

Seeking to quash criticism that Obama had made a joke at the expese of the mentally disabled, a White House spokesman told reporters aboard Air Force One that the remark was “in no way intended to disparage the Special Olympics.”

“He thinks that the Special Olympics are a wonderful program that gives an opportunity to shine to people with disabilities from around the world,” the spokesman said.

Massive security blankets studio
In his opening monologue, Leno joked that people were surprised that Obama would come on NBC, figuring that he would be tired of big companies on the brink of disaster with a bunch of overpaid executives, a reference to questions that have been raised about the financial health of General Electric Corp., the parent company of NBC Universal.

(Msnbc.com is a joint venture of NBC News and Microsoft Corp.)

Asked about being president, Obama said it was “a little like ‘American Idol,’ except everyone is Simon Cowell — everyone has an opinion.”

But “I welcome the challenge,” he said.

When Leno asked whether it was cool to fly on Air Force One, the president replied that he thought it was but that his daughters were not so easily impressed.

Video: Obama highlights
And Obama finally put to rest a raging controversy. Asked about the dog he promised his daughters if won the election, Obama said the puppy would be at its post at the White House by the time he returns from a NATO summit in early April.

Lines began snaking along the street around the studios late Wednesday night. Even though audiences for “The Tonight Show” are booked weeks in advance, supporters of
Obama camped out, hoping to score the hottest ticket in town.

Security was everywhere. The Secret Service, which arrived early in the week to make preparations, put parts of the studio on lockdown, with no vehicles or people allowed in or out. Streets around the studio were also shut down.

By Thursday morning, the show’s usually busy hallway was blocked by wooden partitions. A ramp leading to the large “elephant doors” from the parking area was closed off.

A water delivery worker was pushing two pallets of bottles through the hall. He said security was tighter than usual.

“They just told me I had to be off the lot by 10 a.m.,” he said. “It’s water.”

Obama brushes off GOP complaints
Republicans seized on Obama’s trip and TV appearance as an opportunity to accuse him of ignoring the economy and the furor over $165 million that were paid to employees of troubled insurer AIG over the weekend.

“He flies off to Los Angeles tonight to be on the Jay Leno show,” said Sen. Jon Kyl, R-Ariz. “My suggestion is that he come back — since he’s taken the full responsibility — to get his people together and say: ‘All right, I want to know exactly what happened? Who did what when? And how are we going to prevent this from ever happening in the future?’”

Obama brushed off the criticism, telling reporters Thursday afternoon: “When you’re president, you’ve got to walk and chew gum at the same time.”

Stephanie Stanton of NBC News and Jonathan Lloyd of NBC station KNBC of Los Angeles contributed to this report.